Saving for a First Home Deposit: Tips for Success

For many first-time home buyers, the prospect of saving up for a deposit can feel quite daunting. Depending on the type of financing you’re seeking, you may need to save a substantial amount of money for your new home in Melbourne. Of course, it will all be worth it when you’re able to hold the keys to your turnkey home in your hand for the first time.

As you prepare to set aside money for your first home deposit, there are some tips worth keeping in mind!

Start With a Budget

Saving for your first home should begin with a solid understanding of your current financial situation. Take some time to review your current monthly income, as well as your typical monthly expenses. One easy way to do this is to download monthly statements for all your bank accounts.

Once you have a solid understanding of the amount of money coming in versus the money going out, you’ll have a better idea of what you can afford to set aside each month for your new home.

Consider Paying Off Debts

It may seem counterintuitive to pay off another chunk of debt when you’re trying to save for a home, but there are some situations where it may actually make sense to do so. If you have a high-interest loan, you may actually be better off in the long run by paying off that debt now because this will save you a substantial amount in future interest payments. This will equate to additional money in your pocket as you save for your new home.

Know Where to Cut Back

For many interested in buying new homes, cutting back on luxuries is a great solution for saving more money. The key is learning to separate your necessities from things you don’t truly need. For example, that daily stop at your favourite coffee shop on the way to work may seem like a necessity, but you could just as easily brew your own coffee at home and bring it into work for a fraction of the cost. Be prepared to cut back on some luxuries temporarily so that you can put additional money towards your home deposit.

Explore New Sources of Cash

Depending on what your schedule is like, you might also consider picking up a second income source in your free time. For example, you might decide to snag a part-time job to earn extra income on the weekends, or perhaps you could even start using a hobby to generate income. For instance, if you are handy with arts and crafts you might look into selling your hand-made items online to raise more money for a deposit on your first home.

Saving for your first home will take some time and discipline on your part, but it’ll all pay off in the end. For more information on house and land packages to suit your needs and budget, contact the team at Mimosa Homes today.